Justice Department sides with broadcasters in fight against Aereo

Aereo founder Chet Kanojia, pictured, said the service will appeal to people tired of shelling out hundreds of dollars for pay-TV and thus would help broadcasters from losing viewers to cord-cutting.

Aereo founder Chet Kanojia, pictured, said the service will appeal to people tired of shelling out hundreds of dollars for pay-TV and thus would help broadcasters from losing viewers to cord-cutting. (Jin Lee/Bloomberg)

Joe Flint

The Department of Justice is siding with broadcasters in their legal fight against Aereo, the start-up service that streams local television signals to consumers via the Internet.

In a brief filed at the Supreme Court on Monday afternoon, the department said Aereo is "clearly infringing" on the copyrights of the broadcasters whose content it is streaming without permission, and said a lower court ruling declaring the service legal should be reversed.

Launched in 2012 and available in 13 markets, Aereo plucks the signals of broadcasters and transmits them to the Internet via tiny antennae. Customers pay between $8 and $12 a month for Aereo, whose service includes a cloud-based digital video recorder that can hold up to 60 hours of content.

Broadcasters have charged that Aereo, which is not compensating them for transmitting their signals, is in violation of copyright laws. Last year, the 2nd Circuit Court of Appeals in New York said Aereo's transmissions and recordings are not "public performances" of copyrighted material.

It is an appeal of that ruling that the Supreme Court will hear next month.

The Justice Department siding with broadcasters is the second big win for the industry in the last few weeks. Last month, a federal court in Utah sided with broadcasters and said Aereo will have to shut down its operations there and in Colorado.

Broadcasters are trying to stop Aereo in its tracks because they fear it could threaten the lucrative distribution fees they receive from pay-TV operators in return for carrying their signals. Executives at CBS and Fox have gone so far as to suggest that if Aereo were found legal, they would get out of the broadcasting business.

Aereo, which does not disclose how many subscribers it has, argued that it is not a threat to the future health of broadcasters. Speaking at an analyst conference in January, Aereo founder Chet Kanojia said the service will appeal to people tired of shelling out hundreds of dollars for pay-TV and thus would help broadcasters from losing viewers to cord-cutting.

"I think they will likely be very successful working with us," Kanojia said.

Aereo has also argued that if the broadcasters win, it would be a blow to technology, specifically its cloud-based DVR service.

But the Department of Justice said a ruling against Aereo's service "should not call into question the legitimacy of businesses that use the Internet to provide new ways for consumers to store, hear and view their own lawfully acquired copies of copyrighted work."